Types of mortgage programs

Consumers should discuss their options with mortgage lenders to come up with the program that best meets their needs. Home mortgages can be classified in several ways:

Fixed rate or adjustable rate

Conforming or jumbo loan amount

Government or conventional

Purchase or refinance

Prime or sub-prime

Traditional (forward) or reverse

Construction or permanent

First or second mortgage

What to do before applying for a mortgage loan?

Once they have selected a program, borrowers should compare mortgage rates and terms. That’s easy to do online with sites like LendingTree.com. When comparing mortgage programs, consumers should get the same information from each lender. This includes interest rate, duration of interest rate (Does it adjust? When? By how much?), loan term (15 year, 30 year, etc.), lender fees and 3rd party charges, APR, features like interest-only payments or prepayment penalties, and mortgage insurance or funding fees.

It’s important when shopping for a mortgage to get all home loan quotes at approximately the same time. Mortgage interest rates change constantly, because they are affected by the prices of bonds and mortgage-backed securities (MBS), which are bought and sold like stocks. Global economic news, Treasury auctions and decisions by the Federal Reserve can cause mortgage rates to move up and down very suddenly. Just as stock prices change all day long, so can mortgage rates. This means a quote from Lender A on Monday can’t reliably be compared to one from Lender B on Wednesday. LendingTree allows consumers to easily compare real-time quotes from competing mortgage lenders, helping them make informed choices and save money.